Solid quarter results
contributed to 16% full-year core EPS growth
CORNING, N.Y. -
Corning Incorporated (NYSE: GLW) today announced its results for
the fourth quarter and full year of 2013.
Fourth-Quarter
Highlights
-
Core earnings per share were $0.29*, an increase
of 4% over last year's fourth quarter, and better than expected.
GAAP earnings per share were $0.30.
-
Core sales were $2 billion*, a 2% decline from the
comparable period last year. GAAP sales also were $2 billion.
-
In the Display Technologies segment, price
declines for the quarter were again moderate. Total LCD glass
volume was at record levels, improving 4% over the year-ago period.
The total glass volume combines Corning's wholly owned business and
Samsung Corning Precision Materials Co., Ltd.
-
Optical Communications segment (formerly
Telecommunications) sales increased 12% over the year-ago period.
Full-Year
Highlights
-
Core sales were $7.95 billion*, a 5% increase from
$7.61 billion last year. GAAP sales were $7.82 billion.
-
Core earnings per share were $1.23*, a 16%
year-over-year improvement compared to last year's core earnings of
$1.06*. GAAP earnings per share were $1.34.
-
Free cash flow for the year was strong at $1.2
billion.
Fourth-Quarter Financial
Comparisons
(In millions, except percentages and per-share
amount)
|
Core Performance* |
|
Q4 2013 |
Q4 2012 |
% Change |
Core Net Sales |
$2,005 |
$2,045 |
(2%) |
Core Equity Earnings |
$121 |
$150 |
(19%) |
Core Earnings |
$410 |
$409 |
-- |
Core Earnings EPS |
$0.29 |
$0.28 |
4% |
|
GAAP |
|
Q4 2013 |
Q4 2012 |
% Change |
Net Sales |
$1,956 |
$2,146 |
(9%) |
Equity Earnings |
$70 |
$93 |
(25%) |
Net Income |
$421 |
$155 |
172% |
EPS |
$0.30 |
$0.10 |
200% |
Full-Year Financial
Comparisons
|
Core Performance* |
|
2013 |
2012 |
% Change |
Core Net Sales |
$7,948 |
$7,605 |
5% |
Core Equity Earnings |
$595 |
$713 |
(17%) |
Core Earnings |
$1,797 |
$1,595 |
13% |
Core Earnings EPS |
$1.23 |
$1.06 |
16% |
|
GAAP |
|
2013 |
2012 |
% Change |
Net Sales |
$7,819 |
$8,012 |
(2%) |
Equity Earnings |
$547 |
$810 |
(32%) |
Net Income |
$1,961 |
$1,636 |
20% |
EPS |
$1.34 |
$1.09 |
23% |
*These are non-GAAP financial
measures. Corning moved to disclosing core performance measures to
provide investors a clear view of the company's core operating
results. The reconciliation between GAAP and non-GAAP measures is
provided in the tables following this news release, as well as on
the company's investor relations website. Core performance metrics
(non-GAAP) are adjusted to exclude the impact of changes in
Japanese yen to U.S. dollar exchange rate and other yen
transactions, equity earnings from the polysilicon business of Dow
Corning Corporation, as well as other special items. See "Use of
Non-GAAP Financial Measures" in our Form 8-K filed on January 28,
2014, for details on Core Performance measures.
"2013 was a very successful year for Corning,"
Wendell P. Weeks, chairman, chief executive officer, and president,
said in summarizing full-year results. "We achieved the
company's primary performance goal of restoring earnings growth.
This was accomplished by regaining positive momentum in our LCD
business and growing the earnings in our other segments. We
also delivered on our commitment to enhance shareholder value by
increasing the cash dividend and executing more than $1.5 billion
in share repurchases. The company's performance was recognized by a
41% improvement in the year's share price, a result with which we
are delighted."
Fourth-Quarter Segment
Results
Display Technologies segment core sales were $665 million*, a 5%
decline from sales of $699 million* for the year-ago period. Core
earnings were essentially even on a year-over-year basis.
Optical Communications segment sales were $605
million, a 12% increase from $540 million in last year's fourth
quarter. The increase was driven by carrier network sales in North
American, China, and European markets. However, these sales were a
less-profitable mix than those occurring in 2012. The lower mix,
along with production shutdowns in the fourth quarter, caused the
segment's core earnings to decline 18% year over year.
Over the last decade, the business segment has
evolved from being a manufacturer of optical fiber and cable,
hardware and equipment into a comprehensive provider of
industry-leading optical solutions across the broader
communications industry. To better reflect the strategic focus of
the business, Corning has changed the segment name to Optical
Communications.
Specialty Materials segment sales were $285
million, a 29% decline from the very strong fourth-quarter
performance of $399 million last year. This decline was primarily
the result of significant customer inventory builds that occurred
in the fourth quarter 2012. Core earnings for the segment were down
42% on a year-over-year basis, driven by lower Corning® Gorilla®
Glass volumes.
Environmental Technologies segment sales were $238
million, a 9% increase over fourth-quarter results of $219 million
a year ago. The increase was the result of improved light-duty
automotive and diesel product sales in the quarter. Core earnings
increased 124% on a year-over-year basis, led by improved
manufacturing efficiency.
Life Sciences segment sales were $210 million, a
14% increase from $185 million in sales from a year ago. Core
earnings increased 31% year over year. These increases were driven
primarily by the company's recently acquired Discovery Labware
business.
Core equity earnings from Dow Corning Corporation
improved slightly from a year ago.
Core gross margin in the quarter was 40%*, a 2
percentage points decline from the year-ago period. The decline was
the result of lower Gorilla Glass volume, as well as a weaker sales
mix in the company's Optical Communications segment. Corning ended
the year with $5.2 billion in cash and short-term investments.
Capital spending for the year was $1 billion. The company spent
$1.5 billion in cash on its share repurchase program in 2013. Upon
completion of the Oct. 31, 2013 accelerated stock repurchase
program, the company estimates that approximately 92 million shares
will have been retired since April 2013.
Looking
Forward
"We have entered 2014 with confidence that we can continue building
a bigger, stronger, and more agile Corning," Weeks remarked. "With
our recently completed acquisition of the other 50% of Samsung
Corning Precision, we expect to see direct financial and strategic
benefits to Corning. We are broadening our ability to service our
customers worldwide with flexible fusion glass manufacturing assets
and improving operational efficiencies. The incremental
profitability we expect to achieve with the consolidation of
Samsung Corning Precision into our display business, coupled with a
new $2 billion share repurchase program, should result in a 20%
accretion to earnings per share on a fully diluted basis."
Corning will provide investors with details on the
company's 2014 outlook at its annual Investor Relations meeting in
New York on Friday, Feb. 7. As a preview, the company provided the
following expectations for the first quarter:
-
Corning anticipates that glass volume in its
Display Technologies segment will be down slightly sequentially, in
line with normal seasonality. The company expects LCD glass price
declines to be higher than previous quarters. The price declines
are not related to the SCP acquisition or a result of recent supply
contract renewals. The company expects that price declines will
return to moderate levels after the first quarter. Corning
anticipates another year of growth in the LCD glass market in 2014,
with retail demand up a mid-to-high single digit percentage, as
measured in square feet. The company said that supply chain
inventory levels remain healthy and industry glass supply appears
aligned with overall demand.
-
For the Environmental Technologies segment,
first-quarter sales should increase by a mid-single digit
percentage on a year-over-year basis, driven by improvements in
heavy-duty diesel products in China and Europe.
-
Specialty Materials segment sales are expected to
be consistent on a year-over-year comparison in the first quarter,
which is seasonally the slowest quarter each year. The company
expects its Gorilla Glass volume to increase on a yearly basis in
quarter one, and as the year progresses, be more in line with
overall industry consumption of glass for devices.
Corning anticipates its display segment volume
growth will be driven by consumer demand for larger size
televisions and increases in tablet computers this year. "We are
excited about opportunities to open new market applications for
Gorilla Glass. There was a very positive reaction to our new
Antimicrobial Corning® Gorilla® Glass at the Consumer Electronics
Show earlier this month. And, we expect to expand Gorilla Glass
into the automotive and architectural markets this year," James B.
Flaws, vice chairman and chief financial officer, said.
Flaws added, "We have seen signs of improving
demand for our diesel and automotive emissions control products in
recent months, which should result in growth for our Environmental
Technologies segment this year. And, our new optical communications
offerings are improving wireless network capacity and establishing
all-optical infrastructures to deliver the bandwidth required for
the convergence of voice, video, and data into single network
solutions. The recent increase in funding for the U.S. National
Institute of Health should benefit our Life Sciences business this
year."
"We are optimistic that we will have another year
of improved growth, profitability, and strong cash flow for
Corning," Flaws concluded.
Upcoming Investor
Events
Corning will host investors and provide more information on its
2014 outlook at its annual investor meeting in New York on Friday,
Feb. 7 beginning at 8 a.m. ET at Cipriani on 42nd
Street. Corning will showcase products and technologies prior to
the formal meeting at 9:30 a.m. ET. Attendees can register online
at the company's investor relations website.
Also, company executives will be presenting at the
Goldman Sachs Conference on Tuesday, Feb. 11 and the Morgan Stanley
Technology, Media & Telecom Conference on March 4 in San
Francisco.
Fourth-Quarter Conference
Call Information
The company will host a fourth-quarter conference call on Tuesday,
Jan. 28, at 8:30 a.m. ET. To participate, please call toll free
(800) 230-1059 or for international access call (651) 291-0561
approximately 10-15 minutes prior to the start of the call. The
password is 'QUARTER FOUR'. The host is 'NICHOLSON'. To listen to a
live audio webcast of the call, go to Corning's website at
www.corning.com/investor_relations and click "Investor Events" on
the left. A replay will be available beginning at 11:00 a.m. ET and
will run through 5 p.m. ET, Tuesday, Feb. 11, 2014. To listen, dial
(800) 475-6701 or for international access dial (320) 365-3844. The
access code is 314670. The webcast will be archived for one year
following the call.
Presentation of Information
in this News Release
Non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP. Corning's non-GAAP financial measures exclude
the impact of items that are driven by general economic conditions
and events that do not reflect the underlying fundamentals and
trends in the company's operations. The company believes
presenting non-GAAP financial measures assists in analyzing
financial performance without the impact of items that may obscure
trends in the company's underlying performance. Detailed
reconciliations outlining the differences between these non-GAAP
measures and the most directly comparable GAAP measure can be found
on the company's website by going to
www.corning.com/investor_relations and clicking "Financial Reports"
on the left. These reconciliations also accompany this news
release.
Forward-Looking and
Cautionary Statements
This press release contains "forward-looking statements" (within
the meaning of the Private Securities Litigation Reform Act of
1995), which are based on current expectations and assumptions
about Corning's financial results and business operations, that
involve substantial risks and uncertainties that could cause actual
results to differ materially. These risks and uncertainties
include: the effect of global political, economic and business
conditions; conditions in the financial and credit
markets; currency fluctuations; tax rates; product demand
and industry capacity; competition; reliance on a concentrated
customer base; manufacturing efficiencies; cost reductions;
availability of critical components and materials; new product
commercialization; pricing fluctuations and changes in
the mix of sales between premium and non-premium products; new
plant start-up or restructuring costs; possible
disruption in commercial activities due to terrorist activity,
armed conflict, political or financial instability, natural
disasters, adverse weather conditions, or major health concerns;
adequacy of insurance; equity company activities; acquisition and
divestiture activities; the level of excess or obsolete inventory;
the rate of technology change; the ability to enforce patents;
product and components performance issues; retention of key
personnel; stock price fluctuations; and adverse litigation or
regulatory developments. These and other risk factors
are detailed in Corning's filings with the Securities and
Exchange Commission. Forward-looking statements speak only as
of the day that they are made, and Corning undertakes no obligation
to update them in light of new information or future events.
About Corning
Incorporated
Corning Incorporated (www.corning.com) is the world leader in
specialty glass and ceramics. Drawing on more than 160 years of
materials science and process engineering knowledge, Corning
creates and makes keystone components that enable high-technology
systems for consumer electronics, mobile emissions control,
telecommunications and life sciences. Our products include glass
substrates for LCD televisions, computer monitors and laptops;
ceramic substrates and filters for mobile emission control systems;
optical fiber, cable, hardware & equipment for
telecommunications networks; optical biosensors for drug discovery;
and other advanced optics and specialty glass solutions for a
number of industries including semiconductor, aerospace, defense,
astronomy, and metrology.
Media Relations
Contact:
Daniel F. Collins
(607) 974-4197
collinsdf@corning.com
Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Q4 2013 Financial Tables
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Corning Incorporated via Globenewswire
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